Iowa City requires affordable housing in Riverfront Crossings District

IOWA CITY - Developers looking to build in Iowa City's Riverfront Crossings District must now include affordable housing options or else pay a fee, according to an ordinance passed last week.

The Iowa City Council on Tuesday voted 6-0 to approve the measure. Kingsley Botchway II was absent from the meeting.

Area developers had mixed reactions to the ordinance, which requires builders provide affordable housing in 10 percent of the units being developed for 10 years or pay a fee of up to $80,000 per unit.

If developers choose to pay the fee, that money is to be used to finance other affordable housing projects in the district, said John Yapp, Iowa City's development services coordinator. City officials must re-evaluate the fee every two years and base it on the market rate of units compared to affordable housing unit prices.

The Riverfront Crossings District is located just south of downtown Iowa City.

Glenn Siders, president of Siders Development and a member of the city's Riverfront Crossings District Inclusionary Housing Committee, said this location should work well for the ordinance because it is well-defined and an older part of town that can be rebuilt.

'I think it's a good area to focus on with a unique ordinance the city has developed,” Siders said.

Yapp said, on average, Iowa City sees about 200 new units of multifamily housing each year and he predicts much of that may be in the Riverfront Crossings District next year. He said there are developers 'investigating” the area for potential redevelopment.

Yapp said the ordinance is meant to bring an 'incremental impact on affordable housing” and create a mixed-income neighborhood over time.

The ordinance only applies to new builds in the Riverfront Crossings District. Construction projects already underway in the district are exempt.

As for the impact on area developers, Yapp said the city has received mostly questions about how the ordinance works and developers seemed to understand the intent.

Siders said while no industry likes regulations, developers like him at least had input in the recommendations. He said the ordinance may even encourage developers to build in the district because it simply lays out everything that's required of them.

'I appreciate the fact that they engaged a group of stakeholders that deal with this to get together and have discussions,” Siders said.

Blaine Thomas, owner Blue Sky Developers, said while he can appreciate the city's intent, affordable housing can create financial challenges for others who live in the area. He said when 10 percent of units pay less for housing, the cost of the other 90 percent often goes up.

'My take on it would be that the people who are being offered affordable housing, that money has to come from somewhere in the building, Thomas said. 'Someone is paying for that.”

Thomas said he also has concerns about the way true affordable housing is often defined because 'everybody has different pocketbooks.”

Those who are eligible to rent affordable housing in the district make only equal to or less than 60 percent of the Iowa City area's median income while those who are eligible to purchase affordable housing must make 110 percent or less, according to the ordinance document.

Despite his concerns, Thomas said he is generally supportive of affordable and workforce housing. He said his project in Coralville is workforce housing, which is usually for people who roughly make between 60 and 100 percent of the area's median income. He said he just believes cities should be financially involved in the process of creating affordable housing.

'If they're asking for something like this then everyone has to have participation in it,” Thomas said. 'It can't all fall on the developer.”

As for choosing whether to provide the affordable housing or pay the fee, Yapp said it would probably be a case-by-case basis for developers, who would have to consider things like cost, size and type of units.